Is the Happy Meal irrelevant?

McDonald's doesn't sell as many kids' meals anymore. Has the company moved on?

By Kim Peterson Nov 30, 2010 3:11PM
Credit: (© Darren McCollester/Getty Images)
Caption: McDonald's restaurantTo hear McDonald's (MCD) talk about it, the Happy Meal doesn't seem like a big deal.

The Happy Meal accounts for less than 10% of the company's U.S. business, a spokeswoman told Ad Age. McDonald's won't say much else about its Happy Meal sales and won't give specific numbers.

San Francisco doesn't think much about the Happy Meal. Its board of supervisors has now officially banned the Happy Meal -- in its current form, at least -- starting Dec. 1, 2011. (By the way, a dietitian has created Happy Meal ideas that would be acceptable under the ban. Turkey burgers, baked fries and steamed broccoli sound good to me.)

So perhaps now is a good time to reconsider the Happy Meal. It brings a small fraction of sales, and Mickey D's is getting more traction from McRibs and lattes.

Has the Happy Meal become irrelevant? Post continues after video:
As a percentage of overall sales, Happy Meals have been sliding in recent years, a McDonald's franchise consultant tells Ad Age. That's because the menu has become so broad, he adds. Kids might prefer a Ranch Snack Wrap or a fruit-and-yogurt parfait instead.

McDonald's doesn't spend much to sell the Happy Meal. In the first half of the year, the company spent only $45 million to advertise and market the product, Ad Age reports. Compare that with the $873 million in total U.S. ad spending for McDonald's last year.

Sheesh. Does anyone like the Happy Meal anymore? Well, kids do, and mainly because of the toy (a toy that, in my experience, gets played with and thrown aside within the span of, oh, 20 minutes).

In a 2009 survey by Technomic, 80% to 87% of kids age 6 through 9 said they enjoyed getting a toy with their kids' meals, Ad Age reports.

In the same survey, 37% of kids said McDonald's is their favorite fast-food restaurant. Interestingly, Subway came in second, with 10% of the vote. And Burger King (BKC) was third with 8%.

The Happy Meal will always be a menu staple at McDonald's. But it's losing some importance in the McDonald's strategy of broadening its appeal with a diversified menu.

McDonald's wants to compete with Starbucks (SBUX), not Chuck E. Cheese's. Smoothies and lattes are the future, not a cheeseburger and toy packaged in a colorful box.

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